How new Kenyan currency move will affect you

Banks yesterday assured that following introduction of new generation bank notes, the amount to be exchanged would not be restricted as long as such cash is from known and legitimate sources.

Kenya Bankers Association (KBA) chief executive Habil Okaka said the banks will change the cash through the financial system but conceded that the immediate challenge would be the necessity to reconfigure the Automated Teller Machines (ATM) so that they can read and detect the new currencies efficiently.

The assurance came even as some politicians allied to Deputy President William Ruto read mischief into the abrupt introduction of new- generation banknotes, claiming the government was wrongly targeting them as suspects in illicit financial flows.

But the 20 MPs who were speaking at ACK in Wendani, Kahawa in Kiambu county, nonetheless welcomed the new legal tender by the Central Bank of Kenya (CBK) with Nyali MP Mohammed Ali calling for reduction of the time frame for discarding the current ones.

Lang’ata MP Nixon Korir, who was among the legislators present, said the move would vindicate those being fingered as corrupt while dealing a blow to wanton embezzlement of public funds and money laundering.

His Kiharu the counterpart, Ndindi Nyoro, told off those he charged had been claiming that some Ruto allies are hiding money in their homes, adding that time had come to separate chaff from wheat.

The DP, who was present, did not comment on the new currency but hailed the raft of moves announced by President Uhuru Kenyatta saying they would ease transactions especially by small and micro-enterprises CBK hopes the sudden demonetisation of existing banknotes, and principally the Sh1,000 denomination will help wipe out ill-gotten money perceived to be warehoused in private residences.

Uhuru unveiled the bills during the 56th Madaraka Day celebrations in Narok on Saturday and gave until October 31 for Kenyans to discard the current notes.

Kenya followed a similar move by India, which gave order for issuance of new banknotes in 2016 aimed at reducing the use of illicit and counterfeit cash, including money aimed at funding illegal activities.

Lead to inflation The decision by India was also announced in a televised address, with Prime Minister Narendra Modi declaring that all 500 rupee and 1,000 rupee notes, which accounted for 86 per cent of the currency in circulation, would no longer be legal tender.

There was also apprehension over expected surge of Sh1,000 notes held away from the banks could lead to inflation because if there is too much money in the economy, prices rise quickly.

Activity in the real estate sector — which in the past has been tagged hideout of dirty cash — might also spike corruption and laundered money could be injected into the financial system by buying property in cash.

There was also apprehension that individuals who deliberately keep millions away from the financial system have ingenious ways of hiding such wealth, including converting the money into hard currency or wiring the loot outside the country.

Soy MP Caleb Kositany said the introduction of the new currency designs in the market would also help in taming corruption while Korir said the currency changes would create certainty in the currency market and pave way for CBK’s policies on taming inflation.

Other legislators present at ACK were Simon King’ara (Ruiru), Mohammed Ali (Nyali), Aisha Jumwa (Malindi), Githua Wamacukuru (Kabete) and Kimani Ichung’wa (Kikuyu), Sylvanus Osoro (South Mugirango), Jude Njomo (Kiambu town), Gabriel Kago (Githunguri) and nominated senator Isaac Mwaura Meanwhile, the European Union yesterday tweeted that the move to issue new currency was a step in the right direction in the fight against graft.

“President Kenyatta’s speech on Madaraka Day to effectively fight corruption by issuing new bank notes, suspend double control of imports and ensure the Government pays its dues to the private sector is a further confirmation of the President’s commitment to a prospering economy,” the tweet said.